Using the power of multidimensional interviews followed by data analysis, growth-oriented firms can develop a clear picture of business opportunities.
In the global, highly competitive paint and powder industry, competitors often are viewed as adversaries to be outsmarted. It is especially threatening when business rivals are going after your target markets with products similar to yours. But savvy company leaders also know how to harvest the competitive landscape for new business growth opportunities.

The traditional approach is to learn what your competitors are doing now, predict their near-term plans, and try to improve on those actions for your own company. This knowledge can be helpful, for example, to pinpoint production efficiencies you should adopt or to rush an emerging product to market before your rivals do.

But in the highly regulated and technology-driven paint and powder industry, it is not enough to compete based on existing assets. Growth comes from new products, processes and markets. Traditional market research methods - industry surveys, R&D projections, trend analysis and commercially available industry reports - are limited in revealing the most promising growth opportunities. Traditional methods tell you what your competitors are doing or planning down the road, but not what they may have overlooked on the way. Yet the areas competitors have neglected may represent an untapped gold mine of opportunities for you.

The Big Picture

So how does one go about identifying what the competition is overlooking? The key is to start by looking at everything except what the competition is doing. That is because starting with a competitive assessment tends to narrow the analysis to what is, rather that what could be.

A new method called Disruptive Market Research is helping industrial and high-tech companies go beyond the competitive landscape to find business opportunities. The method uses a systematic, holistic, iterative approach. It looks across an array of industry members with different perspectives on opportunities. It repeatedly takes insights from one part of the industry and plays them off another part, which increases creative thinking and raises confidence in the resulting market forecasts.

Disruptive Market Research is designed to identify truly new or disruptive innovations rather than incremental product improvements. It was developed over the course of 120 projects, mostly for industrial and high-tech markets.

The method involves conducting a new type of highly motivating and collaborative interviews of industry leaders, suppliers, distributors, competitors and customers. Just as anthropologists must develop and evaluate concepts across all levels of a culture, Disruptive Market Research captures the thoughts, perceptions and decision criteria across all levels of a market. Four dimensions that define a market include the stages of a value chain from raw goods to finished product; levels of a distribution channel from manufacturer through various distributors; role in the market, including industry experts, competitors, distributors and customers; and decision-maker type from the technical to the executive level. These dimensions are examined across a range of markets such as architectural vs. industrial coatings, and across time.

What motivates interviewees to respond? Researchers immediately involve them in identifying the symptoms of unsolved problems and then engage them in solution-oriented brainstorming. The method results in response rates as high as 85 percent, overcoming the challenge of inadequate representation found in methods such as focus groups, expert panels and surveys.

Once Disruptive Market Researchers have identified promising opportunities, they often use existing industry information to dig deeper. Surveys can help refine pricing and distribution strategies. Trade shows and product demonstrations can help test target markets. But problem-focused, in-depth interviews remain the backbone of the research. In addition, the methodology uses several principles to assess the competition.

Avoid Marketing Myopia

In defining competitors, it is important to avoid marketing myopia. Look at competition from the consumer's perspective: How else can they solve their problem, other than using a product or service from you or your rivals?

One example is an emerging technology that creates films of extremely thin polymer layers. It has superior oxygen and water barrier properties. If a business developing this technology defines itself as a film maker, the competition would be makers of high-performance films, such as for packaging. But if the product is defined more broadly as an oxygen-impermeable barrier, the material could be used to coat plastic that would replace glass, or metals such as foils, thus expanding the competition to glass and foil producers. This broader view of competitors also expands potential markets.

Use a top-of-mind awareness technique with customers, asking them to describe ways they have tried to solve the problem of interest, then go on to learn which companies provide these solutions. For example, quantitative data may show a dozen providers of your technology, but if customers mention only three suppliers, those three are your real competition. A space these competitors have not entered can mean opportunity for you.

Indirect Approach

Once you have defined the set of competing products or services, it is time to approach companies for information. How do you get information when direct competitors are reluctant to talk with you about their plans?

Talk with businesses that sell products or services that complement yours. For example, a company supplying powder-coating materials could talk with equipment manufacturers that make applicators, cure ovens and thermal analysis instruments. Other complementary businesses could include coatings firms for products such as cosmetics, inks and adhesives. All of these companies will have insights regarding the strengths and weaknesses of the competitors' products and will have heard about planned products.

Another way to unearth potential opportunities is to explore emerging technologies and issues. A company interested in antimicrobial paint or biocide additives could interview actual or potential users such as food processors, health care organizations, ship builders and companies that use clean rooms to manufacture electronics or biological materials. In many cases, these potential customers will have been told by the competitors' representatives about emerging products. These customers often are highly motivated to see competition increase and are willing to share their insights and needs.

For the latest in reducing volatile organic compounds (VOCs), for example, firms could interview state and federal regulators to learn which vendors they're working with to test new solutions. California often is the best place to start because it typically leads the nation in developing new environmental regulatory policies.

In the paint and powder industry, patent searches often are used to learn about new formulations, but they also provide more valuable insights. Patent searches on related products can provide insights into potential customers, including the appropriate contacts. Such searches also can lead to the discovery of potential beta test sites with innovative firms. You can search patent records for specific ingredients or suppliers' materials to get ideas for other markets. In several such searches, Disruptive Market Research revealed new uses for a firm's product in the coatings industry.

Overcoming Competitor Resistance

When speaking with direct competitors, treat them as the industry experts they are, reducing the perceived threat. Ask them to share their perspectives of the industry. Their responses will reveal their knowledge base of the industry and customers. Competitors may be more forthcoming when a third party - someone not directly affiliated with the inquiring company - is gathering the information.

Instead of asking what the firm itself would do when faced with a new, competing product, ask what the industry would pay for a certain emerging product or what it would take for them to switch. One company, for example, said a 1 percent to 2 percent cost improvement would be necessary to change its existing manufacturing methods.

Take a collaborative approach. Rivals can become partners to achieve a mutual goal. During one set of interviews, representatives from paper, aluminium and food processing industries all expressed interest in a joint venture to commercialize a new kind of high-performance coating.

Evaluating Opportunities

Look across all the interview results to answer this question: What are people saying about your technology or product that gives you a competitive advantage in certain markets?

One company wanted to focus on expanding its high-tech service into larger markets, where its competitors were focusing their efforts. Yet Disruptive Market Research interviews with the targeted customers showed no interest in the services, because the large industries already were outsourcing those functions.

Continuing interviews, however, revealed a potential opportunity - companies with much lower service needs, whose small service departments were being overwhelmed. A niche market of firms was identified, and the company quickly made sales to these firms that both the competition and industry experts had overlooked.

Once a promising opportunity is identified, the company must decide how to go after it. Interview results often inform subsequent marketing strategies and even product development decisions. Two examples show how strategically led interviews can reveal ways to break into previously resistant markets.

In one set of interviews, some companies balked at a sensor technology once they heard it was based on near-infrared light. Instead of closing the door on those industries, market researchers probed until they learned that an earlier-generation, near-infrared product had proven unsuccessful. The promotional strategy turned to finding a new name and description for the technology, emphasizing the new generation parameters.

In another example, one industry manager, responding to a prototype high-tech water purification device, said, "I don't know if my people can operate this equipment." Further questioning showed he was concerned about the device's complexity, which would increase training costs. The resulting communication strategy focused on demonstrating a return on investment even with the costs of product adoption and staff training.

Revealing the Hidden

The19th century artist René Magritte said, "Each thing we see hides something else we want to see." The key to truly strategic competitive insights is to look away from the competition and examine the industry as a whole. Then bring back opportunities that emerge and check them against the competitors' actions. Doing this makes the competitive landscape less threatening and frees your firm to apply its capabilities in new and exciting market opportunities.